Hungarian drugmaker Richter Gedeon Nyrt. (RICHTER.BU) said Thursday it plans to move schizophrenia drug cariprazine into late-stage testing early next year after the experimental drug showed encouraging results in an intermediate trial.

Richter is developing the drug jointly with Forest Laboratories Inc. (FRX), of the U.S.

Data from an intermediate trial involving 732 patients showed that patients with schizophrenia treated with cariprazine experienced significant symptom improvement compared to those who were given a dummy pill, or placebo, the companies said in a joint press release.

In an earlier study, the drug had already shown promise in the treatment of bipolar disorder. Forest and Richter now plan to start phase III trials of the drug for both indications early next year.

Drugs are typically tested in three phases. Data from the third phase is typically the base for a possible approval from regulators, and study a drug's effect in sick people. Earlier phases aim at finding the right dose, and establishing the safety and efficacy of a drug.

"Both the latest clinical trial results for cariprazine in patients suffering from schizophrenia and the previous proof of concept results in bipolar mania, confirm our long held belief in this compound," said Howard Solomon, Chairman and Chief Executive of Forest Laboratories, in a statement.

The study results are positive and came earlier than expected, said Gergely Palffy, analyst at KBC Securities. If the drug succeeds in late-stage testing, it may be introduced on the market after 2012, he said.

Richter, which has a large portfolio of generic drugs - drugs that lost patent protection - and a strong presence in Eastern Europe, said the test results are confirming its strategy of investing into the development of original drugs.

"These results are considered as a further step towards our commitment conducting original research in the field of CNS disorders, where our team has excellent expertise," said Erik Bogsch, Richter's Chief Executive, in a statement.

Richter shares rose on the news in a lower Hungarian market.

At 0915 GMT, they were up HUF200, or 0.5%, to HUF39,700 on the news. The shares gained 40% so far this year, outperforming the broader European healthcare sector which is up 4.4% year-to-date.

-By Veronika Gulyas and Anita Greil, Dow Jones Newswires; Veronika.Gulyas@dowjones.com and anita.greil@dowjones.com